Addressing Inequity In Indian Healthcare System: A New Financing Strategy

Countries that have universal or near universal access to healthcare have health financing mechanisms which are single-payer systems in which either a single autonomous public agency or a few coordinated agencies pool resources to finance healthcare. It is this that contributes primarily to equity in healthcare in these countries. All OECD countries, excluding the USA, have such a financing mechanism. It is only countries like India and a number of developing countries, that still rely mostly on out-of-pocket payments, where universal access to healthcare is elusive. In such countries those who have the capacity to buy healthcare from the market most often get healthcare without having to pay for it directly because they are either covered by social insurance or buy private insurance. In contrast those who suffer a hand-to-mouth existence, a large majority of the population, are forced to make direct payments, often with a heavy burden of debt, to access healthcare from the market because public provision is grossly inadequate or non-existent. This paper suggests a framework and strategy for India to move towards financing mechanisms that can create equity. It brings together data on India’s health expenditure and financing and project how a new financing strategy will benefit those who have inadequate access to healthcare presently.